Energy Market Update – 23 July 2025
Gas and power markets remained broadly steady, with gas prices consolidating around recent lows and power pricing supported by low renewables output. Carbon, coal, and oil markets saw marginal changes, with sentiment remaining cautious.
UK gas prices saw a slight rebound from three-week lows, with the front-month NBP contract trading at 80.93p/therm, holding within a tight range. The market was supported by balanced UK system fundamentals and consistent demand for exports to Europe, which averaged over 50mcm/day. This continued injection into European storage is aimed at meeting winter readiness targets. As of 21 July, EU storage was 65.42% full, still trailing last year by 17.47% and lagging the 5-year average by nearly 5% . Norwegian flows are expected to improve significantly from 25 July following the conclusion of annual maintenance at the Troll field, which should restore 21.8mcm/day of capacity. Meanwhile, LNG sentiment remains positive, with 13 vessels scheduled to arrive in Northwest Europe by month-end, which may boost injections further, assuming demand remains moderate.
Power markets experienced mixed movement but showed slight upward correction, particularly in the UK and Netherlands, due to subdued wind generation. UK baseload contracts edged higher, with the front-week rising by £0.55 to £84.25/MWh and the summer 2026 contract increasing £0.85 to £72.25/MWh. Nuclear availability in the UK remains tight due to unplanned outages at Hartlepool and Torness, keeping CCGT output elevated at 9.2GW, comprising 30.8% of the generation stack. Interconnector flows from France supported UK supply, aided by the recovery of French nuclear generation following a recent heatwave. Forward prices in Germany and France, however, softened, with bearish sentiment driven by easing fuel costs and weak industrial demand. Renewable output remains below seasonal norms across continental Europe, further underpinning gas-fired generation requirements.
In commodity markets, Brent crude traded in a narrow range, last priced at $68.59/bbl, supported by trade progress between the US and Japan but capped by weak macroeconomic indicators. The announcement of a joint Alaskan LNG venture between the two nations provided some longer-term supply optimism. European carbon prices eased slightly, with EUA December 2025 contracts falling €1.03 to €69.11/tonne, while the UK ETS rose marginally to £57.12/tonne. In coal markets, API2 CIF ARA for 2026 slipped to $109.92/tonne. On the LNG front, US exports dominated, accounting for 95 deliveries over the past year, with smaller volumes from Qatar, Algeria, and Nigeria. JKM prices were slightly weaker, with demand still soft in Asia.